KUMBA IRON ORE LIMITEDKUMBA IRON ORE LIMITED2011 Annual results presentationReal Mining. Real People. Real Difference

First ore leaving Kolomela mine for Saldanha

DISCLAIMERCertain statements made in this presentation constitute forward-looking statements. Forward-looking statements are typically identified

by the use of forward-looking terminology such as 'believes' 'expects' 'may' 'will' 'could' 'should' 'intends' 'estimates' 'plans‘by the use of forward-looking terminology such as believes , expects , may , will , could , should , intends , estimates , plans ,

'assumes' or 'anticipates' or the negative thereof or other variations thereon or comparable terminology, or by discussions of, e.g. future

plans, present or future events, or strategy that involve risks and uncertainties. Such forward-looking statements are subject to a number

of risks and uncertainties, many of which are beyond the Company's control and all of which are based on the Company's current beliefs

d i b f S h b d i d b h i bj band expectations about future events. Such statements are based on current expectations and, by their nature, are subject to a number

of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or

performance, expressed or implied, by the forward-looking statement. No assurance can be given that such future results will be

achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company and its subsidiaries. The

forward-looking statements contained in this presentation speak only as of the date of this presentation and the Company undertakes no

duty to, and will not necessarily, update any of them in light of new information or future events, except to the extent required by

applicable law or regulation.

1

PERFORMANCE OVERVIEW2

KEY FEATURES – 2011KEY FEATURES 2011Record: safety, exports, earnings and dividends

• Exceptional safety performance17 0

Headline earnings (R billion)

• Headline earnings of R17 billion, up by 19%; R53.13 per share

• Record export sales volumes of 37.1Mt despite production challenges 3.1

7.3 7.0

14.317.0

p p p gat Sishen mine

• R21 billion paid to shareholders which included:

2007 2008 2009 2010 2011

36 1 37.1

Export sales (Mt)

– R17.9 billion paid in dividends

– R2.7 billion capital returned to employees through Envision phase 1

24.0 24.9

34.2 36.1 37.1

• R8.7 billion paid to South African government

• Kolomela mine delivered five months ahead of schedule and within budget44 2

Dividend (R/share)

2007 2008 2009 2010 2011

g

• Judgment on High Court Review delivered7.5

21.014.6

34.5

44.2

3

2007 2008 2009 2010 2011

SAFETY HEALTH AND ENVIRONMENTSAFETY, HEALTH AND ENVIRONMENTRecord safety performance

SAFETY Significant improvement in LTIFR

• No loss of life in 2011 for the first time since Kumba’s listing

• LTIFR improved by 33% from 0.12 in 2010 to 0.08

• Kolomela achieved 22 million fatality free and LTI free man hours

0.22

0.12 0 12

63.6%

• Kolomela achieved 22 million fatality-free and LTI-free man hours

- 23 months without any lost-time injury

• Aggressive focus on fatal risk prevention

0.12

0.07

0.12

0.08

HEALTH

• Raised profile on health with focus on reducing exposure

2007 2008 2009 2010 2011

F t litiRaised profile on health with focus on reducing exposure

to noise and dust

• Continued improvement in HCT participation

3

Fatalities

ENVIRONMENT

• Continued commitment to reduction targets for energy consumption,

1 1 1

0

2007 2008 2009 2010 2011

CO2 emissions and water use

4

2007 2008 2009 2010 2011

OPERATIONAL REVIEW5

SISHEN MINESISHEN MINEBetter 2H11 but not sufficient to catch up on production

• Planned increase in waste mined, up by 17% Y-on-Y to 119.0Mt; stripping ratio increased to 2.6x

• Sishen mine’s production decreased by 6% to 38.9Mt

– DMS plant production decreased by 9% to 25.4Mt owing to mining feedstock constraints

– Jig plant production increased by 2% to 13.5Mt - in excess of design capacity

Mt12 months

31 Dec 201112 months

31 Dec 2010 % change6 months

31 Dec 20116 months

30 Jun 2011 % change

Total tonnes mined 165.0 153.2 8% 88.3 76.7 15%

– Waste mined 119.0 102.0 17% 67.2 51.8 30%

– ROM production 46.0 51.2 (10%) 21.1 24.9 (15%)

Production 38.9 41.3 (6%) 20.3 18.6 9%

– DMS plant 25 4 28 0 (9%) 13 1 12 3 7%– DMS plant 25.4 28.0 (9%) 13.1 12.3 7%

– Jig plant 13.5 13.3 2% 7.2 6.3 14%

Stripping ratio* 2.6 2.0 3.2 2.1

Finished product inventory (closing) 1.1 4.7 1.1 4.9

6

*Waste tonnes mined / ex-pit ore

THABAZIMBI MINETHABAZIMBI MINELOM remains 2016

• Waste mined increased by 33% to 44.2Mt as development of the last new pit progressed

• Production down by 55% to 0.9Mt; planned as mine nears end of life, and unplanned due

to production difficulties

• Domestic sales down by 30% to 1.4Mt, due to AMSA’s reduced off-take

• Minimal contribution to Kumba’s profit

• Project Phoenix will replace production from Thabazimbi mine beyond 2016

12 th 12 th 6 th 6 thMt

12 months31 Dec 2011

12 months31 Dec 2010 % change

6 months31 Dec 2011

6 months30 Jun 2011 % change

Total tonnes mined 45.9 35.2 30% 21.6 24.3 (11%)

– Waste mined 44.2 33.2 33% 20.7 23.5 (12%)

– ROM production 1.7 2.0 (15%) 0.9 0.8 (13%)

Production 0.9 2.0 (55%) 0.4 0.5 (20%)

Sales – domestic 1.4 2.0 (30%) 0.3 1.1 (73%)

7

Stripping ratio 26.0 16.6 23.0 29.4

Finished product inventory (AMSA) 0.7 1.2 (42%) 0.7 0.5 40%

KOLOMELA MINEKOLOMELA MINE Delivered five months ahead of schedule with record safety performance

• Record safety performance

• Delivered five months ahead of schedule due to excellent performances by Kumba and Transnet

• Successfully commissioned during 2011; delivered production of 1.5Mt

• First ore shipped to China and Europe in December

• R7.0 billion of capex spent to date

420 h till t b b ilt dditi l i i i t t b d li d d d ti– 420 houses still to be built, additional mining equipment to be delivered and production

ramp up facilitated

• On track to produce between 4Mt and 5Mt while ramping up in 2012, and 9Mtpa from 2013p p g p p

Mt12 months

31 Dec 201112 months

31 Dec 2010 % change6 months

31 Dec 20116 months

30 Jun 2011 % change

Total tonnes mined 34.6 18.6 86% 19.3 15.3 26%

– Waste mined 30.3 18.6 63% 15.6 14.7 6%

– ROM production 4.3 - - 3.7 0.6 -

8

Production 1.5 - - 1.5 - -

Stripping ratio 7.1 - - 4.2 - -

LOGISTICS AND SALESLOGISTICS AND SALESRecord volumes railed and exported

• Record tonnes of 39.1Mt railed to port by Transnet, up by 7%

• Total sales increased by 1% to 43.5Mt; supplemented by stockpiles

• Record export sales volumes, up 3% to 37.1Mt

Mt12 months

31 Dec 201112 months

31 Dec 2010 % change6 months

31 Dec 20116 months

30 Jun 2011 % change

Railed to port 39.1 36.5 7% 19.6 19.5 1%

– Sishen mine (incl. Saldanha Steel) 38.7 36.5 6% 19.2 19.5 (2%)

– Kolomela mine 0.4 - - 0.4 - -

Total sales 43.5 43.1 1% 21.4 22.1 (3%)

– Export 37.1 36.1 3% 18.7 18.4 2%

– Domestic 6.4 7.0 (8%) 2.7 3.7 (27%)

– Sishen mine 5 1 5 0 2% 2 5 2 6 (4%)Sishen mine 5.1 5.0 2% 2.5 2.6 (4%)

– Thabazimbi mine 1.3 2.0 (35%) 0.2 1.1 (82%)

Finished product inventory at ports (closing) 3.0 2.1 43% 3.0 2.7 11%

9

– Saldanha 1.3 0.9 44% 1.3 1.1 18%

– Qingdao 1.7 1.2 42% 1.7 1.6 6%

Real Mining. Real People. Real Difference

MARKET PERFORMANCE10

MARKET PERFORMANCE

• Global crude steel production up by 6% in

MARKET PERFORMANCEGlobal 2011 crude steel production – Strong start but weaker finish

Crude steel production (Mt)

+6%2011 as a whole…– + 7% in China– + 4% in Kumba’s traditional markets

(EU Japan Korea) 1731791,400

1,600

1,230

1,5141,428

+16%+6%

(EU, Japan, Korea)

• …but down 4% in 2H11 vs. 1H116% in China 383

450476

136

168176

139

800

1,000

1,200,

772 742

-4%

– - 6% in China– - 4% in EU, Japan, Korea

• 2011 started strong but ended weak 572 637 683

383

238 238

88 8893 86

400

600

800

• 2011 started strong but ended weak– BF closures in EU due to weak demand– Small Y-on-Y growth in Japan and Korea as

Korean growth offset Japanese declines

572353 330

0

200

2009 2010 2011e 1H-11 2H-11eKorean growth offset Japanese declines

– Annualised production in China slowed at the end of 4Q11

China RoW Japan & Korea EU27

11

Source: WSA, GMO Analysis

MARKET PERFORMANCE

• Global seaborne iron ore exports up by 7% Y-on-Y, i li ith l b l d t l d ti

MARKET PERFORMANCEGlobal seaborne exports – Strong second half

Global seaborne iron ore exports*in line with global crude steel production…– Strong growth from Australia (+10%) and

non- traditional sources (Iran, Indonesia, Vietnam, + 27%)

1H11 2H11e HoH 2010 2011e Y-on-Y

in Mt % in Mt %

Brazil 157 196 +25 332 353 +6

– Modest growth from Brazil (+ 6%)– Sharp decline from India (-18%)

• …and up 10% in 2H11 vs. 1H11

Australia 203 240 +18 402 442 +10

India 57 32 -44 109 89 -18

S. Africa 29 26 -10 51 55 +8

RoW 59 64 +8 97 123 +27p– Brazil and Australia recovered strongly

from weather disruptions in 1H11 (+21%)– India fell sharply due to political constraints (-44%)

Chinese iron ore imports versus implied use of domestic ore* (Mt)

+8.1% +5.4%

Total 505 558 +10 991 1,063 +7

• Chinese domestic ore supplemented seaborne imports, balancing Chinese supply and demand, and underpinning prices

178Mt* i 1H11223 303

301

600

800

1,000

~147

838 906955

488 467+35.8%

-0.1% -4.3%

– 178Mt* in 1H11– Falling to 123Mt* in 2H11 as Australian and Brazilian

exports increased and iron ore prices declined– Chinese domestic ROM production grew strongly, up by

615 603 654

310 344

178 123

200

400

600 488 467

-2.0%-30.9%

+8.4%

+10.9%

24% Y-on-Y, but grades continued to fall

* Rich ore equivalentSource: WSA, GTIS, CNBS, EUROSTAT, GMO Analysis

12

02009 2010 2011e 1H-11 2H-11e

Rich Ore Import + Stocks Rich Ore Domestic

MARKET PERFORMANCE

• Record prices in 1H11

MARKET PERFORMANCEStrong export prices – easing in final quarter

Export sales and prices

1H11 2H11 T t l

– Crude steel production up 7% Y-on-Y

– Seaborne exports up ‘only’ 4% Y-on-Y

1H11 2H11 Total

Total export sales (Mt) 18.4 18.7 37.1

- Contract (%) 71 77 73

Spot (%) 29 23 27• Prices eased in 2H11

– Combination of lower steel prices, crude steel production and higher seaborne supplies

- Spot (%) 29 23 27

Average FOB price received (US$/tonne) 169 149 159

Average Platts freight rate (US$/tonne) 13 18 15

– Higher seaborne supply reduced the need for high-priced Chinese domestic ore

62% Fe index fell by 35% in six week period

Export sales geographical split

% 2009 2010 2011

Europe and MENA 11 17 14– 62% Fe index fell by 35% in six-week period from mid-September to end-October, but stabilised towards year end

• Pricing mechanisms adapted in China and

Europe and MENA 11 17 14

Japan and Korea 14 22 18

China 75 61 68

Total 100 100 100• Pricing mechanisms adapted in China and Europe from a lagging quarter mechanism Volumes shipped

Mt 2009 2010 2011

Source: Kumba Iron Ore

13

Total Kumba ore shipped 34.8 36.8 37.7

Total shipped by Kumba 21.6 18.7 21.7

FINANCIAL REVIEW14

FINANCIAL REVIEWFINANCIAL REVIEWExcellent financial performance

Headline earnings per share (R/share)

19%Revenue (R billion) 25%

38.7

48.6

44.6753.13

19%

11.5

21.4 23.4

10.00

23.02 21.87

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Dividend per share (R/share)Operating profit (R billion)

CAGR: 41% CAGR: 51%

Dividend per share (R/share)

44.2

Operating profit (R billion)

32.0

28%27%

7.5

21.014.6

34.5

6.0

13.5 12.9

25.1

15

2007 2008 2009 2010 20112007 2008 2009 2010 2011

CAGR: 43% CAGR: 56%

FINANCIAL REVIEWFINANCIAL REVIEWHeadline earnings up 19%

Rand million12 months

31 Dec 201112 months

31 Dec 2010 % change6 months

31 Dec 20116 months

30 Jun 2011 % change

Revenue 48,553 38,704 25% 24,487 24,066 2%

Operating expenses (16 587) (13 573) 22% (9 438) (7 149) 32%Operating expenses (16,587) (13,573) 22% (9,438) (7,149) 32%

Operating expenses (excl. royalty) (14,825) (12,163) 22% (8,518) (6,307) 35%

Mineral royalty (1,762) (1 410) 25% (920) (842) 9%

Operating profit 31,966 25,131 27% 15,049 16,917 (11%)p g p ( )

Operating margin (%) 66% 65% 61% 70%

Profit attributable to: 22,298 18,289 22% 10,462 11,836 (12%)

Equity holders of Kumba 17,042 14,323 19% 7,990 9,052 (12%)

Non-controlling interest 5,256 3,966 33% 2,472 2,784 (11%)

Headline earnings 17,048 14,329 19% 7,987 9,061 (12%)

Effective tax rate (%)* 25% 24% 25% 25%

Cash generated from operations 32 631 25 555 28% 18 644 15 037 24%Cash generated from operations 32,631 25,555 28% 18,644 15,037 24%

Capital expenditure 5,849 4,723 24% 3,951 1,898 108%

* Excluding Secondary Taxation on Companies (STC) and the mineral royalty

16

FINANCIAL REVIEWFINANCIAL REVIEWRevenue record: Stronger export prices

• Revenue up 25% to R48.6 billion, driven by– Weighted average increase of 26% in export prices– 3% or 1Mt increase in export sales volumes– Offset by the strengthening Rand/US Dollar exchange rate (2011:R7.25; 2010: R7.30)

55 000 Revenue (R million)

9,588 764 335 168 48,553

45 000

50 000

38,704

35 000

40 000

30 000

35 000

2010 Price Volume Currency Shipping 2011

17

FINANCIAL REVIEWFINANCIAL REVIEWSishen mine unit cash cost: Input cost pressure and lower production

• Unit cash cost increased by 35% Y-on-Y to R150/tonne– Above inflationary cost escalations in input costs (R12.74/tonne), of which diesel comprised R7.00/tonne

– Planned 17% increase in waste mining volumes (R10.82/tonne)– 6% decrease in production volumes (R8.87/tonne)

150 47160

Unit cash cost (R/tonne)

10.82

8.87150.47

(US$20.75)

140

150

6.84

12.74

111.20(US$15.23)*

120

130

( )

100

110

2010 Inflation Cost escalation Mining volume Production volume 2011

* The 2010 unit cash cost was restated to take into account non-cash share-based payment expenses

18

FINANCIAL REVIEWFINANCIAL REVIEWSelling and distribution costs: Record volumes moved

• 22% increase in selling and distribution costs– 7% increase in volumes railed on Sishen-Saldanha export channel to record 39.1Mt– 3% increase in volumes shipped from Saldanha port to 37.6Mt– Increase in rail and port tariffs, driven by:

9% annual tariff escalation~9% annual tariff escalation4.1Mt railed at super tariff0.4Mt railed from Kolomela mine

Selling and distribution costs (R million)

447 31 4 3,698

3 500

3 800

Selling and distribution costs (R million)

183

3,041

2 900

3 200

2 300

2 600

19

2 0002010 Volume Tariff Selling and

marketingDemurrage and other 2011

FINANCIAL REVIEWFINANCIAL REVIEWCapital expenditure analysis

• 24% Y-on-Y increase in capital expenditure to R5.8 billion– Expansion capex of R3.1 billion – Stay-in-business (SIB) capex of R2.7 billion

• Capex peaked in 2011 as construction of Kolomela nears completion• Sishen Westerly Expansion Project commenced in 2011; R1 2 billion project capex• Sishen Westerly Expansion Project commenced in 2011; R1.2 billion project capex• SIB capex of some ~R3 billion for 2012 and 2013, mainly due to:

– Sishen mining fleet replacement and associated infrastructure

Capital expenditure (R million)

3 996

4,7235000

6000

7000

Total

Total

Total*5,848

Total

5,400

Capital expenditure (R million)

1,2171,624

3,0002,500

2,7793,099

1 800

3,996 4,800

3,0002000

3000

4000

2,7453,103 3,300

2,100

2,8003,800

Total

1,800

5000

1000

2009 2010 2011 2012 2013

SIB E i T t l it l dit

1,000

* Includes R953 million (2010: R604 million; 2009: R189 million) capitalised mining operating expenses – Kumba ceased capitalisation of operating expenses on Kolomela mine on 1 December 2011 when the mine achieved commercial production

20

SIB Expansion Total capital expenditure Capex range

FINANCIAL REVIEW

• 31% increase in cash generated Y-on-Y to R35.3 billion (before mineral royalty of R1.7 billion)

FINANCIAL REVIEWCash flow variance: Substantial cash returns to stakeholders

• R8.7 billion paid to the South African government• R20.6 billion returned to shareholders via cash dividends, including

– R4.2 billion dividend flow to BEE shareholders– R2 7 billion Envision capital distribution to employee participantsR2.7 billion Envision capital distribution to employee participants

35,29996 7,035

13 74232 00036 00040 000 R20.6 bn

R8.7 bn

1,700

4,170

13,742

2,6625,849

1648 000

12 00016 00020 00024 00028 000

4,17010,8001641,670 1,551 (9,249)

-12 000-8 000-4 000

04 000

ash d *

est

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ash ndds

Ope

ning

net

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Cas

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Inte

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ends

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vide

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** Env

isi

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endi

tu

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Clo

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ca

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f fin

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ivid

e

2011

div

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ivid

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TC)*

**

21

Tax

a

Div

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Impa

c

Fina

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cl. m

and

ST

** Dividends paid 2011 consist of the final cash dividend for 2010 of R21.00/share (R6.7 billion) and the interim dividend for 2011 of R21.70/share (R7.0 billion)

*** The final SIOC and Kumba dividends were declared after 31 December 2011 and are included for information purposes only

* Cash generated before mineral royalty

FINANCIAL REVIEWFINANCIAL REVIEWGearing

• Strong balance sheet; net cash position of R1.6 billion• R3.2 billion term facility maturing in 2012 – alternative funding options being considered

Rand million12 months

31 Dec 201112 months

31 Dec 2010

Interest-bearing borrowings 3 191 3 185Interest-bearing borrowings 3,191 3,185

Cash and cash equivalents (4,742) (4,855)

Net cash (1,551) (1,670)

Total equity 20,592 18,376

Interest cover (times) 206 77

Gross debt/equity (%) 15% 17%

Gross debt/market capitalisation (%) 2% 4%

22

FINANCIAL REVIEWFINANCIAL REVIEWSIOC dividend: Realising essential empowerment in SA

• BEE shareholders have received R13.6 billion* in dividends since inception five years ago– R852 million paid to our communities– Our employees received R374 million, after loan repayment

• Exxaro Resources has received R10.4 billion

Rand million 2011 2010 2009 2008 2007

Gross dividend declared by SIOC 21 192 15 381 6 925 9 928 3 630Gross dividend declared by SIOC 21,192 15,381 6,925 9,928 3,630

STC 1,926 1,399 630 888 364

Dividend declared by SIOC 19,266 13,982 6,295 9,040 3,266

- Kumba 14,250 10,348 4,658 6,690 2,417

- Exxaro 3,851 2,796 1,259 1,808 653

- SIOC Community Development Trust 578 419 189 271 98

- Envision (Employee share ownership scheme) 587 419 189 271 98

Di id d h fl BEE h h ld ** 4 1 0 1 8 6 1 811 1 0 6 392Dividend cash flows to BEE shareholders** 4,170 1,876 1,811 1,076 392

- Exxaro 3,516 1,810 1,744 1,036 374

- SIOC Community Development Trust 527 4 8 8 7

- Envision (Employee share ownership scheme) 127 62 59 32 11

23

Envision (Employee share ownership scheme) 127 62 59 32 11

* Including the 2011 final dividend** Dividend cash flows in 2011 consist of the final cash dividend for 2010 and the interim dividend for 2011

FINANCIAL REVIEWFINANCIAL REVIEWKumba dividend

• Total shareholder return of R119/share in 2011– Capital growth to R500/share at 31 December 2011 (2010: R425/share)– Total dividend of R44.20/share (Final 2011 dividend: R22.50/share)

• 2011 dividend cover of 1.2• Cash dividend sustained through continued global economic uncertainties

Total dividend

2011

Final dividend

31 December 2011

Interim dividend 30 June

2011

Total dividend

2010

Total dividend

2009

Earnings per share (Rand per share) 53.11 24.88 28.23 44.66 21.94

Dividend per share (Rand per share) 44.20 22.50 21.70 34.50 14.60

Total dividend declared (Rm) 14,250 7,247 7,003 11,101 4 671

Dividend cover (times) 1.2 1.1 1.3 1.3 1.5

24

LEGAL UPDATE25

LEGAL UPDATELEGAL UPDATEContinuing to protect shareholders’ interests

HIGH COURT REVIEW • Oral arguments heard from 15 to 18 August 2011 and judgment handed down on 21 December 2011

– Excellent result in that SIOC has secured 100% of Sishen’s mineral rights – 21.4% prospecting rights granted to ICT set aside– Judgment stands until set aside

• DMR and ICT lodged applications to appeal on 3 February 2012

ARBITRATION WITH AMSA• Kumba continues to believe that the Sishen supply contract with AMSA has lapsed. This is what

the arbitration will determine• Arbitration has been postponed until the resolution of the High Court Review• Arbitration has been postponed until the resolution of the High Court Review• Interim supply agreement currently extends to 31 July 2012

STAKEHOLDER ENGAGEMENTSTAKEHOLDER ENGAGEMENT• SIOC remains committed to and continues engagement with government stakeholders

26

PROJECTS UPDATE27

PROJECT PIPELINEPROJECT PIPELINECommitment to South African project pipeline

• Pipeline to achieve 70Mtpa by 2019 in South Africa– The current 26Mtpa studies underway are expected to deliver an additional 20Mtpa production by 2019

• Joint Transnet/industry study for expansion of the Sishen-Saldanha Export Channel to increase capacity beyond 60Mtpa– Currently at pre-feasibility stage; completion of study anticipated in 1Q12Currently at pre-feasibility stage; completion of study anticipated in 1Q12– Kumba will align its production growth plan with the study’s outcome

26Mtpa in study vs.Project pipeline (Mt)

70155

70

80

9026Mtpa in study vs.

20Mtpa in target

-2Feasibility 5.0Pre-feasibility 2.5

43

9

40

50

60 Concept 18.5

10

20

30

0Sishen and Thabazimbi

Kolomela (2013)

N. Cape studies growth

target

Limpopo growth target

Thabazimbi closure

2019 target Total studies

28

PROJECTSPROJECTSEstablishing a second footprint in Africa

• Strategy evolved from being a South African-focused growth company to an African-focused growth company, to establish a second mining footprint in central andwest Africa:

– Joint-venture approach with Anglo American

B d t f ti i l– Broad spectrum of options in several target countries:

near-development projects

early-stage greenfields opportunities

– African iron ore space is extremely active and information at this stage is still gsensitive

29

OUTLOOK30

BUSINESS OUTLOOKBUSINESS OUTLOOK

PRODUCTION AND COSTS• Production at Sishen mine is planned to return to nameplate capacity; Kolomela mine on track to

produce between 4Mt and 5Mt in 2012• Waste mining ramp-up at Sishen mine, which began in 2009, will continue. A planned increase of

around 20% in waste mining in 2012 will put upward pressure on unit costsg p p p• Kolomela on-mine costs (FOR) are expected to be slightly lower than Sishen mine, but FOB costs

a little higher

SALESSALES• Export sales volumes anticipated to increase around 3Mt in 2012

– Increase of 4Mt to 5Mt anticipated from Kolomela mine in 2012 will be offset by lower stock volumes at Sishen mine

• Domestic sales volumes remain dependent on AMSA’s off take requirements• Domestic sales volumes remain dependent on AMSA’s off take requirements

MARKETS• Current market conditions expected to persist in first half of 2012• 2H12 prices dependent on improvement in overall global economy, and, in particular, monetary

policy easing in China

PROFITABILITY• Profit remains sensitive to price and Rand/US$ exchange rate

31

SUMMARYSUMMARY

• Record safety performance as journey towards achieving zero harm continues

• Record financial performance achieved

• Record volumes railed and exported, despite production challenges at Sishen minep p p g

• Exceptional return to stakeholders continues

• Kolomela mine delivered five months ahead of schedule and within budget with exceptional safetyKolomela mine delivered five months ahead of schedule and within budget, with exceptional safety performance recorded

• Continued focus on achieving 70Mt by 2019 in South Africa; studies in progress to establish a second mining footprint in central and west Africamining footprint in central and west Africa

• High Court judgment delivered in December 2011

32

THANK YOU

33

ANNEXURE 1ANNEXURE 1Revenue: Sector analyses

12 months 12 months 6 months 6 months31 Dec 2011 31 Dec 2010 % change 31 Dec 2011 30 Jun 2011 % change

Export (Rm) 42,454 32,951 29% 21,161 21,293 (1%)

Tonnes sold (Mt) 37.1 36.1 3% 18.7 18.4 2%

US Dollar per tonne 158 125 26% 129 168 (23%)

Rand per tonne 1,144 913 25% 1,132 1 160 (2%)

Domestic (Sishen mine) (Rm) 2,480 2,209 12% 1 323 1,157 14%

Tonnes sold (Mt) 5.1 5.0 2% 2.5 2.6 (4%)

Rand per tonne 487 442 10% 529 439 21%

Domestic (Thabazimbi mine) (Rm) 908 665 37% 463 445 4%

Tonnes sold (Mt) 1 4 2 0 (30%) 0 3 1 1 (73%)Tonnes sold (Mt) 1.4 2.0 (30%) 0.3 1.1 (73%)

Rand per tonne 648 333 95% 1,543 395 291%

Shipping operations (Rm) 2,711 2,879 (6%) 1,540 1,171 32%

Total revenue 48 553 38 704 25% 24 487 24 066 2%Total revenue 48,553 38,704 25% 24,487 24,066 2%

Rand/US Dollar exchange rate 7.25 7.30 7.61 6.88

34

ANNEXURE 2ANNEXURE 2Aggregate operating expenditure

12 months 12 months 6 months 6 monthsRand million 31 Dec 2011 31 Dec 2010 % change 31 Dec 2011 30 Jun 2011 % change

Cost of goods sold 8,761 6,570 33% 5,116 3,645 40%

Cost of goods produced 8,089 6,142 32% 4,667 3,422 36%

Production costs 8,485 6,430 32% 4,774 3,711 29%

Sishen mine 7,064 5,626 26% 3,842 3,222 19%

Thabazimbi mine 976 743 31% 523 453 15%

Kolomela mine 332 - 100% 332 - 100%

Other 113 61 85% 77 36 114%

Inventory movement WIP (396) (288) 38% (107) (289) (63%)

A grade (166) 29 (672%) (102) (64) 59%A grade (166) 29 (672%) (102) (64) 59%

B grade (230) (317) (27%) (5) (225) 98%

Inventory movement finished product 247 (171) 244% 201 46 337%

Other 425 599 (29%) 248 177 40%Other 425 599 (29%) 248 177 40%

Mineral royalty 1,762 1,410 25% 920 842 9%

Sublease rentals (8) (8) - (4) (4) -

Selling and distribution 3,698 3,041 22% 2,016 1,682 20%

35

Shipping operations 2,374 2,560 (7%) 1,390 984 41%

Operating expenses 16,587 13,573 22% 9,438 7,149 32%

ANNEXURE 3ANNEXURE 3Reconciliation of non-controlling interest

12 months 12 months 6 months 6 monthsRand million 31 Dec 2011 31 Dec 2010 31 Dec 2011 30 Jun 2011

Opening balance 4,038 1,650 4,976 4,038

Profit for the year 5,256 3,966 2,472 2,784

Exxaro 4,461 3,669 2,091 2,370

SIOC Community Development Trust 669 236 314 355

Envision 126 61 67 59

Dividends paid (4,078) (1,834) (2,196) (1,882)

Exxaro (3,516) (1,811) (1,893) (1,623)

SIOC Community Development Trust (528) (4) (285) (243)

Envision (126) (61) (67) (59)Envision (126) (61) (67) (59)

Recoupment of Envision dividend* 92 42 49 43

Interest in movement in equity reserves (456) 256 (492) 36

Non-controlling interest – closing balance 4,760 4,038 4,760 4,976

* Minority interest in the recoupment by SIOC of the dividend received by Envision

36

ANNEXURE 4ANNEXURE 4Reconciliation of attributable profit

12 months 12 months 6 months 6 monthsRand million 31 Dec 2011 31 Dec 2010 31 Dec 2011 30 Jun 2011

Profit 22,298 18,289 10,462 11,836

Attributable to non-controlling interests (5,256) (3,966) (2,472) (2,784)

Exxaro (20%) (4,461) (3,669) (2,091) (2,370)

SIOC Community Development Trust (669) (236) (314) (355)

SIOC Employee Share Participation Scheme (126) (61) (67) (59)SIOC Employee Share Participation Scheme (126) (61) (67) (59)

Attributable to owners of Kumba 17,042 14,323 7,990 9,052

37

ANNEXURE 5ANNEXURE 5Headline earnings

12 months 12 months 6 months 6 monthsRand million 31 Dec 2011 31 Dec 2010 31 Dec 2011 30 Jun 2011

Profit attributable to owners of Kumba 17,042 14,323 7,990 9,052

Net loss on disposal and scrapping of property, plant and equipment 10 5 - 10

Net loss on disposal of investment - 2 - -

17,052 14,330 7,990 9,062

Taxation effect of adjustments (3) (1) (5) 2Taxation effect of adjustments (3) (1) (5) 2

Non-controlling interest in adjustment (1) (1) 2 (3)

Headline earnings 17,048 14,328 7,987 9,061

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ANNEXURE 6ANNEXURE 6Sishen mine unit cash cost structure (R/tonne)

180 168.38

6.02

31.35

27.87135

150

165

122 48

150.47

131.01

28.16

25.337 05

6.27

9.5

7.91

4.174.56

5.32

17 75

24.5821.12

24.14

90

105

120 111.20

122.48

100.35

33.9311.4115.87

13.6117.13

21.7119.53

13.87

15.2014.51

22.225.40

7.056.213.46

3.8117.75

60

75

90

28 05 30 91 29 43 31.38 37.71 34.75

20.4124.70 22.51 25.31

33.9329.76

11.41

15

30

45

28.05 30.91 29.43 31.38

-

15

1H10 * 2H10 * 2010 * 1H11 2H11 2011

* The 2010 unit cash cost was restated to take into account non-cash share-based payment expenses of R103 million or R2.49/tonne

Labour Outside services Maintenance Fuel Drilling and blasting Energy Other

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ANNEXURE 7ANNEXURE 7Sishen mine unit cash cost structure (%)

100

56 6 5 6 5

3 3 3 3 4 4

19 21 20 19 18 18

80

90

11 13 12

14 12 13 17 17 17

6

50

60

70

2020 20

19 20 20

13 13 13 13

30

40

50

28 25 26 24 22 2310

20

30

-1H10 * 2H10 * 2010 * 1H11 2H11 2011

* The 2010 unit cash cost was restated to take into account non-cash share-based payment expenses of R103 million for the year or R2.49/tonne

Labour Outside services Maintenance Fuel Drilling and blasting Energy Other

40

ANNEXURE 8

1. Optimising value of the current operations by:• pursuing a value-maximising product portfolio

ANNEXURE 8Strategy in action

• pursuing a value-maximising product portfolio• improving productivity and operational efficiencies through

our asset optimisation programme• using our technical expertise and resources to drive a

technology strategy that achieves a competitive advantage b i i th l it ti f l dby increasing the exploitation of lower-grade ore resources

2. Capturing value across the value chain by:• exploiting the physical properties of our ore to develop niche

lump-sized productsp p• pursuing optimal iron ore pricing mechanisms• securing a balanced geographical spread of customers to maximise

profits and minimise risks• investigating blending opportunities at our current operations to enhance

tili ti d t f i i d d ti ti t ti i d t lresource utilisation, and ports of origin and destination to optimise product value

3. Delivering on growth projects by:• pursuing greenfields and brownfields growth targets in South Africa• using existing lower-grade resourcesusing existing lower grade resources• seeking value-enhancing volume growth in Africa

4. Organisational responsibility and capability by:• creating and leaving a positive legacy in the communities in which we operateg g g y• becoming the partner of choice for the broadest range of stakeholders through our commitment to safety

and health, environmental management and corporate social investment

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ANNEXURE 9ANNEXURE 9Social development: exceeding Mining Charter targets

• 49.8% HDSAs in management46

49.8 HDSA in management (%)

• 11.9% women in core mining positions across the Group

• 45.6% of discretionary procurement spend with BEE suppliers

3842 44 46

Chartertarget

BEE suppliers

• Almost R189 million spent on social development in 2011

Women in core positions (%)

2007 2008 2009 2010 2011

7.6

10.911.9

Chartertarget

Rand millionTotal payments Discretionary1

payments BEE payments2BEE as % of discretionary

spend

2009 2010 2011

BEE as percentageof discretionary spend

2009 12.5 8.6 3.2 36.9%

2010 13.8 9.4 3.7 39.1%

2011 17.3 13.2 6.0 45.6%

N t

36.9 39.145.6

42

Notes1. Discretionary spend is only relevant to South Africa and is the value against which the local HDSA spend is

measured. It excludes payments to government (for example, taxes and royalties) and parastatals (for example, Eskom and Transnet).

2. BEE payments refers to payments to vendors with a 25% +1 share black ownership

2009 2010 2011

ANNEXURE 10ANNEXURE 10Empowerment: Envision Employee Share Scheme

• Started November 2006, with listing of Kumba Iron Ore Limited, previously Kumba Resources

E h l t i ll i d 3 375 it th h h• Each employee typically received 3,375 units through scheme

• November 2011: conclusion of first five-year term

• Total payout to 6,209 full-time employees of over R2.6 billion

• All employees below management level, who were with the scheme from the beginning, received pre-tax cash payouts of R576,045 each

• Second five-year term implemented in November 2011

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ANNEXURE 11ANNEXURE 11Northern Cape Province growth portfolio

Kolomela Expansion Project SEP 1B Project

Location Kolomela mine, Northern Cape Province Location Sishen mine, Northern Cape Province

Product Product quality similar to what is currently being produced by Kolomela mine Product Fine ore - 0.2mm to 1mm

Stage of project Concept study to be completed in 2012. Feasibility study Stage of project Feasibility study to be completed in 2012Stage of project completion planned for 2014 Stage of project Feasibility study to be completed in 2012

Potential first production 2017 Potential first production 2013

Potential production 6Mtpa Potential production 0.75Mtpa

Life of project 20 years Life of project 20 yearsLife of project 20 years Life of project

Sishen Lower Grade Project Sishen DMS concentrate

Location Sishen mine, Northern Cape Province Location Sishen mine, Northern Cape Province

Product Lower quality products Product High-grade iron ore -200 micron fraction or pellet feedProduct Lower quality products Product High-grade iron ore -200 micron fraction or pellet feed

Stage of project Concept study to be completed by 2014. Feasibility study by 2017 Stage of project Feasibility study to be completed by 2013

Potential first production 2019 Potential first production 2017

Potential production 3-6Mtpa Potential production 1.1Mtpa by 2018 – Envisaged to be expanded to 4Mtpa by 2019

Life of project 20 years Life of project 20 years

44

ANNEXURE 11 (CONT)ANNEXURE 11 (CONT)Limpopo Province growth portfolio

Project Phoenix Zandrivierspoort- Polokwane Iron Ore Company (JV: 50%)

Location Thabazimbi, Limpopo Province Location Near Polokwane, Limpopo Province

Product Fine ore (75%) and lump ore (25%) Product Concentrate or blast furnace pellets. High-quality product – 69% Fe

Stage of project Feasibility study to be completed by 2014 Stage of project Phase 1 – Pre-feasibility by 2013Phase 2 – concept study

Potential first production 2016 Potential first production Phase 1 – 2015 (2.5Mt)Phase 2 – 2019 (additional 3.5Mt)

Potential production 3.4Mtpa Potential production 6Mtpa

Life of project 20 years Life of project 23 years

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ANNEXURE 12ANNEXURE 12

• Kumba received external recognition for outstanding performance in various categories during 2011,

External recognition and awards

including:

– Kumba won the top award in the sustainability category and was a joint winner in the socio-economic category at the Nedbank Green Mining Awardsg y g

– Kumba received the ‘fast growth company award’ for investing in people, environment, sustainability and governance at the Annual African Access National Business Awards

– Kumba’s Responsibility Report was ranked first in the best sustainability report category at the South African Publication Awards

Kumba was placed third in the Sunday Times Top 100 companies for its returns to shareholders– Kumba was placed third in the Sunday Times Top 100 companies, for its returns to shareholders over five years

– Kumba was ranked sixth in the Financial Mail Top Companies 2011 Review

– Kumba was placed tenth in the Ernst and Young Excellence in Corporate Reporting

46